The level playing field tilts
5/05/2008 at 14:47
Up until this week the “Level Playing Field” Pierre envisaged when he started eBay has been level. All sellers paid the same fees, and even with the introduction of volume discounts, and more recently €0.01 listings for Italian Premium Shops, the same opportunities were open to everyone.
That’s just changed with the news that Buy.com has been granted a deal to list their entire inventory on eBay.com, which has been described as “economically feasible for both parties”. This is the first time that a special deal has been done for a large retailer, and although no specific details have been released it probably won’t be the last, eBayInk adds “any partnerships will be assessed on a one-off basis with hand picked partners”.
Whilst Buy.com have a special pricing deal, they’ll be limited to one listing per product, will have to compete in Best Match to get their product in front of buyers and will be subject to the same feedback and DSR criteria as other eBay sellers.
eBay have stated that their “goal is to get to the point where there is no reason you wouldn’t put all of your inventory on eBay“, with the expectation that the price structure to do so would be in place on eBay.co.uk by Christmas 2008. It’s likely that eBay themselves will learn from the Buy.com deal which is likely to affect pricing structures for all sellers in the future.
The big question is of course does a deal with a large retailer to bring new-in-season merchandise to eBay add depth to the inventory available, or does it detract from the overall buyer experience?
via Randy
fedupwithebay says
3:46 pm on 05/05/2008
Great for buyers as an alternative to extremely confusing Amazon.
Not good for the poor sellers who may loose out as another “big boy” prices them out of the marketplace.
Blighty says
4:04 pm on 05/05/2008
A complete and total betrayal of the little guy.
I wonder how ebay will treat them if the negs rack up, or will the level playing field become a 1:3 gradient?
If *anyone* relies 100% on ebay they really do need to have their heads tested.
Randy Smythe says
4:13 pm on 05/05/2008
And there are more big guys on the way!
fedupwithebay says
5:27 pm on 05/05/2008
Care to share “who” Randy? Forewarned is forearmed.
Independant retailers are diminishing fast it seems, and allowing such large players to enter what must be the first ever global launchpad of millions of independant businesses, is going to push a lot of these businesses into the dirt.
Like a scene from the film Demolition Man, eventually there will be only one shop and only one resturant …..
Keith says
9:54 pm on 05/05/2008
I can foresee something along the lines of – Ebay main site for Gold PS & above all paypal only with free p&p & DSR’s minimum 4.8 on all 5.
The rest on a half.com equivelant. But as a seperate company so any dodgy sellers or Vero issues will not be associated with the ‘Ebay brand’
I think Ebay is now ‘Brand building’ for a sell out or merge in a couple of years.
Ebay will become what they wanted Ebay Express to be.
Chris Dawson says
10:19 pm on 05/05/2008
I’m in two minds here… firstly it’s worth noting that many sellers on eBay selling “new” products aren’t selling latest models/fashions/brands, but specialise in older models/last seasons fashions/own branded goods. By using a major retailer eBay access latest models/in season fasions/mainstream brands.
Second if it attracts buyers to a “more retail” eBay and existing sellers still list buyers that find they can’t afford the latest models/fashions/brands will still find older models/last seasons fashions/own branded goods and of course used products from existing sellers.
I know that’s simplistic, but I can think of many examples of manufacturers/retailers who could bring a lot to add (not detract) to the table.
Keith says
10:19 pm on 05/05/2008
I just had a look at the refunds policy for Buy.com & one of it’s high sellers.
Talk about jumping through hoops. You could probabely run a profitable business just on the restocking fees alone.
It just makes you realise how lucky Uk buyers are when compared with buyers in the U.S..
Keith says
11:06 pm on 05/05/2008
Does anyone remember a few months back when Ebay.com had Ghost listings of a few hundred thousand?
And all the conspiracy theories about Ebay.com inflating it’s listings?
When asked I think Ebay just said that ‘tests had now ended’
Could the ‘ghost’ listings have belonged to Buy.com?
Andrea says
11:26 pm on 05/05/2008
Ebay will eventually turn into a regular run of the mill shopping centre with exactly the same shops as any other shopping centre has. No individual boutiques, no quirky coffee shops…just starbucks and nexts that churn out the same ol’ same ol’.
How boring.
Richard says
2:09 am on 06/05/2008
Chris, I think you’ll find it tough going trying to put a positive spin on this move by eBay.
From what i’ve heard, this could well be the first of many such mega corp sellers coming to ebay. The same will happen as it does in the real world when one or more of these giants such as Wal-Mart/Asda, Tesco and the like moves into a town, in a short space of time it kills all the small traders around it.
While this move makes financial sense for eBay it does no sellers any favours in the long run and buyers have less choice too.
eBay isn’t a retailer, never has been, they don’t seem to be able to grasp that if you want the latest stuff on the site at the cheapest prices and stil take a 15-20% cut of the sale it’s not going to happen. That’s exactly why there is older models, discontinued and used items galore on ebay, it’s about the only areas there’s any profit to be made after eBay and PayPal’s cut. Seller and listing numbers are going down for that very reason, but boosting the marketplace short term in this way will be the one that kills it longer term.
Chris Dawson says
9:22 am on 06/05/2008
You’ve got it in a nutshell, Richard. “if you want the latest stuff on the site at the cheapest prices and stil take a 15-20% cut of the sale it’s not going to happen” is why they’re cutting deals to get it. The “older models, discontinued and used items galore on ebay” is what current sellers are bringing to the table, and many of those sellers can’t access the latest fashion/models in the first place.
It’s the large retailers who have the most up-to-date inventory, but it’s not priced correctly (margin wise) for the eBay marketplace which is why it’s taking special deals to get it listed.
There are a lot of eBayers that won’t have to worry, if they have last years fashion, older revisions of products, or last seasons model they’ll gather up the buyers that don’t want to pay top dollar for the latest releases.
Bryn says
11:17 am on 06/05/2008
Wont Ebay risk losing a lot of its buying customer base in the long run if just becomes a bog standard ecommerce / price comparison site? Dont a lot of buyers use it because of its weird and wonderful ways and if it just becomes and advertiser for the big boys surely many will disappear ??
Also should vast amounts of smaller sellers disappear and its dominated by the a selection of huge companies isnt Ebay risking losing its power? At the moment with so many sellers and mainly small ones Ebay can do what it likes without reprisal where as the roles could be reversed if huge chunks of its revenue come from a small selction of massive companies. ie Tesco demand further reduction in fees else takes its vast inventory away?
Richard says
1:59 pm on 06/05/2008
Chris, It’s not the only the huge mutli-nationals that have access to the latest inventory, myself being one such seller. If eBay were to cut everyone else the same deal as buy.com it would be on ebay already, in fact not so very long ago it was, the current fee structure/prices make listing a lot of stuff uneconomical and unviable for most sellers.
Many long time sellers are upset that the only people getting this deal, which may be the future for everyone else, are a huge company. What about the years of loyalty that many sellers have shown ebay, does that count for nothing? Right now I’m sure i’m not the only one who feels upset in the way this was done, even though as it stands currently it doesn’t directly affect me.
Like some have already said, the way things are going eBay will end up nothing more than any other big shopping site out there. My own feeling is that it will end up as little more than a poorly done copy of Amazon.
Randy Smythe says
10:53 pm on 06/05/2008
Richard,
That is the direction they are headed “poorly done copy of Amazon”
The Buy.com deal is really just a controlled SIS (stores in search) I wonder what happens if the “buyer experieince” suffers with Buy.com customers. Where does eBay go from there?
Swan says
12:47 pm on 07/05/2008
This would be a major error I think.
Cos the first delivery note the big boys send out will have a 5% discount code for use on their own website.
Ebay becomes a customer finding site for a dozen or so large retailers.
lovediscount says
2:21 pm on 07/05/2008
Do you think that ebay UK will try a similar scheme over here with one of the big UK sellers?
just asking as the UK team generally run lots of trials on things that are going to shape the future of the overall ebay picture.
schuhstore says
2:33 pm on 07/05/2008
I can tell your Chris, that eBay is trying to court large UK retailers like Next and Dorothy Perkins. The horses mouth told me….As far as i know they have not got anywhere because “large high street” retailers are not willing to put resources in place to work with eBay.
Coming from the angle of my company, i can see the problems retailers have with selling on eBay, as some people in my company still see eBay as a “thrift market” and they do not want our brand associated with eBay, but from our side of the business, we embraced eBay and its been nothing short of brilliant for us. Our clearance rate in Sale periods and ourside of sale periods has gone through the roof, and we have not had to discount as heavily when it come to our main sale periods as we have sold more merchandise at first markdown price in our sale through our eBay operation.
Although, we did have to put resources in place to set up our operations with Channeladvisor, and we are continously developing our eBay store and methods of shopping on eBay.
Look out for our ‘Buy on eBay – Pick up in Store’ function that should be going live in the next month or so. This will give the customer the opportunity to choose to pick their shoes up in any one of our store with no delivery charge (£5 saving). We are in the advance stages of testing it now, so hopefully it should be good to go soon, and another reason for doing this is to try and localise eBay to a certain degree, and of course improve our DSR scores for shipping and handling!